Number: RS21127
Title: Federal Securities Law: Insider Trading
Authors: Michael V. Seitzinger, American Law Division 
Abstract: Insider trading in securities may occur when a person in possession of material nonpublic information about a company trades in the company's securities and makes a profit or avoids a loss. The Securities Exchange Act of 1934 and the Insider Trading Sanctions Act of 1984 have provisions which forbid insider trading. One provision of the 1934 Act requires the disgorgement of short-swing profits by named insiders. The 1934 Act's general antifraud provision has been used many times to sanction insider trading. In addition, in 1984 Congress enacted legislation imposing up to treble damages upon one who engages in insider trading.
Pages: 3
Date: Updated January 30, 2002